Research Foundation of the
State University of New York

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Research Foundation for the
State University of New York
Allocation and Budgetary
Controls Over Unrestricted Funds

Purpose
To determine if the Research Foundation for the State University of New York had: a fair and
equitable methodology for charging (assessing) SUNY campuses for the costs of central office
operations and statewide initiatives; adequate procedures to allocate unrestricted funds to
SUNY campuses and System Administration; and sufficient budgetary controls over allocations of
unrestricted funds.

Background
The Research Foundation for the State University of New York (Research Foundation) is a private,
nonprofit educational corporation. Its primary mission is to support research at the State University
of New York (SUNY) by administering sponsored projects and sharing intellectual property. The
Research Foundation has a central office and operating units at 30 SUNY campuses. The Research
Foundation derives income from sponsored program activities, investments, inventions and
licenses, and gifts and other sources. Revenues for the fiscal year ended June 30, 2013 totaled
about $1.07 billion, mostly from sponsored grants and contracts.

The Research Foundation's central office provides payroll, purchasing, accounts payable, legal
and information technology services for grant administration to the campuses. The central office
derives operating revenue from the assessments it charges the campuses and SUNY System
Administration. Each location's assessment is based primarily on the amount of sponsored grant
revenue it generates. For the year ended June 30, 2013, the Research Foundation generated
about $203.5 million in unrestricted revenues. Through the assessment process, about $30.9
million in unrestricted funds were allocated to the Foundation's central office operations and
certain statewide initiatives. The Research Foundation allocated the remaining $161.6 million
in unrestricted funds to the campuses and SUNY System Administration to support sponsored
program administration, research, and other initiatives. Additionally, $3.5 million in royalties was
paid to the inventors of intellectual property and $7.5 million placed in Investment Reserves.

Key Findings

The Research Foundation's current methodology for assessing the campuses is fair and equitable.
In addition, the assessments were calculated properly, and campus officials were satisfied with
the services provided by the Research Foundation's central office.

From 2014 through 2017, the Research Foundation projects relatively stable amounts of
external grant revenues (between $1.04 billion and $1.08 billion annually) for SUNY. However,
SUNY reports that sponsored revenues at the College of Nanoscale Science and Engineering
could significantly exceed current projections. Material increases or decreases in sponsored
revenues could impact the amounts of unrestricted funds available as well as the propriety of
the current assessment methodology.

The Research Foundation's central office has adequate procedures to allocate unrestricted
funds to the campuses. Allocations were calculated correctly, and budgetary controls over such
allocations were sufficient.

Key Recommendations

Continue to monitor and evaluate the current assessment methodology to ensure it remains
fair and equitable. Place particular focus on changes in external revenue generation of the
College of Nanoscale Science and Engineering.

Other Related Audits/Reports of Interest

Research Foundation for the State University of New York: Selected Human Resource Controls
and Potential Conflicts of Interest (2011-S-24)

State Government Accountability Contact Information:Audit Director: Brian MasonPhone: (518) 474-3271; Email:StateGovernmentAccountability@osc.state.ny.usAddress: Office of the State Comptroller; Division of State Government Accountability; 110 State Street, 11th Floor; Albany, NY 12236